Just finished watching the past webinar on analyzing deals by @Brandon Turner assuming I did it right. Tell me do you think this is a good deal or bad deal. I got it from Zillow.com. This is the area that I will be living in. I have multiple ways to finance this deal.
*This link comes directly from our calculators, based on information input by the member who posted.
- You're forgetting insurance.
- Your interest rate is very optimistic. I'd figure closer to 5% as an investment property.
- Also, unless you're going to owner occupy, expect 20-25% down payment.
- The listing says that "tenants pay utilities," but what about water/sewer? That usually isn't sub-metered in a duplex.
- Lawn care?
My math shows you around $350/month cash flow, which isn't bad for a duplex. CoC ROI is around 11-12%.
@Anthony Ward :
To add/clarify all the points @Jaysen Medhurst mentioned above, based on this report, given your estimates in the report, both Interest rate on the loan and down payment will be higher for an investment property. I would use the figures @Jaysen Medhurst provided as a starting point. Cash to close and repairs will most likely be upwards of $36,500.
With the following assumptions, 5% interest, $116k mortgage, insurance $450 a year, everything else equal. You are still looking to cash flow ~$525. CoC ROI is still 17.2% which is great.
Items to consider:
- Yard maintenance - I normally have a clause in my lease that the tenant is responsible for yard maintenance on their respective plots.
- Water/sewer cost - Identify who is responsible and add/remove expense as needed.
- Owner occupied route - add in PMI (0.85% of loan amount per year if under 90% LTV) if paying less than 20% down and adjust interest rate as needed.
- Near Future capital expenditures - have inspections been performed? Things you may not see can hit your bottom line like damaged sewer lines, and pests. Walk through with a trusted contractor/plumber.
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